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AT&T follows Verizon, lengthens device upgrade period to two years

post #1 of 40
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It would appear that AT&T iPhone users will have to wait a bit longer to upgrade to their next handsets, as the carrier announced on Sunday that it will be extending its hardware upgrade cycle to a length of two years.

AT&T
Source: Engadget


Beginning June 9, AT&T customers with contracts ending on or after March 1, 2014 will have their upgrade qualification time extended to 24 months, the carrier said on its official blog. Prior to the policy shift, customers were eligible for an upgrade after only 20 months.

Previously, Engadget reported on the switch, citing a leaked memo provided by an anoymous source.

The shift, which applies to all devices sold by the telecom, will also affect all new AT&T customers. However, the new upgrade period will not affect Corporate Responsible Users with contractual upgrade terms.

AT&T notes the policy change will bring upgrade cycles in alignment with its two-year long contract terms. Verizon, AT&T's chief rival, made a similar decision early in April, noting that doing so was in keeping with the way consumers buy devices.

"In alignment with the terms of the contract," Verizon said in a statement at the time, "customers on a two-year agreement will be eligible for an upgrade at 24 months vs. today's early upgrade eligibility at 20 months."

It seems AT&T is following Verizon's lead, as the two carriers' policies will take effect over the same time frame. Verizon is making the change for contracts starting in January of 2014, while AT&T's shift is scheduled to follow just two months later.

Consumer desire for the latest and most advanced mobile devices is what draws them to the larger carriers, but those devices are expensive. Consumers typically do not want to pay the full cost of an iPhone or similar device up front, so carriers offer subsidies which they must recoup over the life of a contract. Competition in the wireless segment is increasing, though, and the carriers are now more interested in making sure that their customers stay with them as long as possible.

Apple's iPhone is AT&T's best-selling smartphone and has been for some time. The carrier sold 4.8 million iPhones in the March quarter. In that same quarter, AT&T added 296,000 new contract subscribers, though most of those were new tablet customers, and lost 69,000 phone customers.
post #2 of 40
I'm surprised they didn't do it sooner. They have to provide value for their shareholders, after all.

lovely. /s

It used to be 18 months, then 20 months, I guess why wait, just jump to 24.
Edited by JeffDM - 6/9/13 at 5:03pm
post #3 of 40
Quote:
Originally Posted by JeffDM View Post

I'm surprised they didn't do it sooner. They have to provide value for their shareholders, after all.

lovely. /s

It used to be 18 months, then 20 months, I guess why wait, just jump to 24.

4 months doesn't seem like much but that's millions of dollars in extra revenue.
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post #4 of 40
Eh. Five bucks says they'll start offering early upgrades to "qualified" customers once their stock rooms begin filling up with unsold units.
post #5 of 40
24m is common. Just buy it outright every time. Easy to sell up when you done.
post #6 of 40
Quote:
However, the new upgrade period will not affect Corporate Responsible Users with contractual upgrade terms

Looks like corporate customers get real contracts while individuals just get policies that allow the carriers to screw them however they want.
Quote:
Verizon, AT&T's chief rival, made a similar decision early in April, noting that doing so was in keeping with the way consumers buy devices.

If this is the way we buy devices anyway, why do they need to cram it down our throats?

I am so sick of carriers screwing their customers while telling them they are doing it to better serve them.
post #7 of 40
Thought the idea was to keep customers from jumping ship. If you took the early upgrade you were required to re-up. If you wait until contract is up you might be more likely to try another carrier.
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post #8 of 40
Quote:
Originally Posted by Splash-reverse View Post

24m is common. Just buy it outright every time. Easy to sell up when you done.

Better yet, buy it outright and avoid AT&T entirely. Straight Talk or Net10 will be about half the price of AT&T.
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post #9 of 40
Quote:
Originally Posted by Robin Huber View Post

Thought the idea was to keep customers from jumping ship. If you took the early upgrade you were required to re-up. If you wait until contract is up you might be more likely to try another carrier.
I agree with this completely. With an early upgrade option, I can get a new phone at 20 months and stay with my same carrier. If I want to change carriers I am forced to wait four more months. With the new policy it makes it much easier for me to jump ship. Especially since I can port my number to the new carrier.
I think this is an example of not seeing the Forest for the trees
post #10 of 40
Quote:
Originally Posted by dasanman69 View Post

4 months doesn't seem like much but that's millions of dollars in extra revenue.

I'm sure it does, I agree. Hence the "adding value to shareholders" line.
post #11 of 40
Quote:
Originally Posted by Splash-reverse View Post

24m is common. Just buy it outright every time. Easy to sell up when you done.

Except you're still paying the same monthly price for voice and data as people who subsidize. They'd rather you do that because then they're getting even more out of you. Would be nice if you got a cheaper monthly rate if you bought the device up front though. I may be mistaken but I think T-Mobile actually does do this.
post #12 of 40
Quote:
Originally Posted by ndirishfan1975 View Post


With the new policy it makes it much easier for me to jump ship ... I think this is an example of not seeing the Forest for the trees

 

This is a really dumb move on AT&T's part. It's all about revenue - that's four more months of subsidizing a phone that was already paid for in the first 20 months.

 

Quote:

Originally Posted by RedRaider2011 View Post


Would be nice if you got a cheaper monthly rate if you bought the device up front though. I may be mistaken but I think T-Mobile actually does do this.

 

I've been contemplating switching to T-Mobiles plan because of the very reason they offer a cheaper monthly rate and you can just buy your phone outright.
 
The only thing holding me back was that I would have to hang onto my iPhone 4S for four extra months in order to cancel my AT&T contract... looks like AT&T took care of that problem for me.
post #13 of 40
Getting phones early is the only reason I haven't looked at other carriers. If I have to wait for the full 24 months I'll definately be shopping around.
post #14 of 40
Quote:
Originally Posted by JeffDM View Post

I'm surprised they didn't do it sooner. They have to provide value for their shareholders, after all.

lovely. /s

It used to be 18 months, then 20 months, I guess why wait, just jump to 24.

I don't see the issue really, I'm six months out of contract because the iPhone 5 was too soon and I can wait for the 5S. Apple's one-phone-per-year plan fits this model nicely. Once you get on schedule you are only skipping one model of phone... For regular folks that's more than good enough.... I'm still camping on a 3GS here and don't feel like I've missed anything versus the iPhone 5 I got my son when his contract was up.
post #15 of 40
Businesses are no longer in the business to satisfy the customer. It's all about greed and profits. Once we get this business model brainwashed into out heads the happier these companies will be. Look at Adobe, gas prices, politics. This is just the way it's going to be. The sad thing is that these people know that the public will raise hell at first and then eventually calm down and simply take it up the wazoo.
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post #16 of 40
Quote:
Originally Posted by mabhatter View Post

I don't see the issue really, I'm six months out of contract because the iPhone 5 was too soon and I can wait for the 5S. Apple's one-phone-per-year plan fits this model nicely. Once you get on schedule you are only skipping one model of phone... For regular folks that's more than good enough.... I'm still camping on a 3GS here and don't feel like I've missed anything versus the iPhone 5 I got my son when his contract was up.

Well, if your phone breaks, the extra 4-6 months would have made a difference. But you're right, it's best to ride it out to the next update if you can.
post #17 of 40
Coming soon! 30 month upgrades with a two year contract!
post #18 of 40
Here's a novel idea%u2013how about a removing the subsidy amount when the contract term is concluded?
post #19 of 40
Whenever I see the AT&T logo I always think of Candy Crush.

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post #20 of 40
Quote:
Originally Posted by RedRaider2011 View Post

Except you're still paying the same monthly price for voice and data as people who subsidize. They'd rather you do that because then they're getting even more out of you. Would be nice if you got a cheaper monthly rate if you bought the device up front though. I may be mistaken but I think T-Mobile actually does do this.
T-Mobile does indeed do this. There's also no contract.
post #21 of 40
Quote:
Originally Posted by Robin Huber View Post

Thought the idea was to keep customers from jumping ship. If you took the early upgrade you were required to re-up. If you wait until contract is up you might be more likely to try another carrier.

 

This is exactly what I was thinking. I don't see how this policy can do anything other than increase the likelihood that customers will jump ship to other carriers at the time they purchase a new iPhone. 

 

Prediction: next step will be a reduction, and ultimately elimination, of the subsidy.

post #22 of 40
Quote:
Originally Posted by jragosta View Post


Better yet, buy it outright and avoid AT&T entirely. Straight Talk or Net10 will be about half the price of AT&T.

 

I currently pay AT&T about $85/month plus fees & taxes for 450 minutes, 1500 txt messages and unlimited data. I use very few minutes, my text messages are well below my limi, and my data usage, while typically under 1.5 GB, sometimes peaks well above 2GB.

 

Net10 caps you at 1.5GB/month if you have an AT&T SIM card.

 

 

Exactly how would this be a good move for me?


Edited by freediverx - 6/10/13 at 4:13am
post #23 of 40
Quote:
Originally Posted by Durandal1707 View Post

T-Mobile does indeed do this. There's also no contract.

This move by AT&T may increase the number of people that start thinking seriously about buying their iPhones outright and shopping for a discounted voice and data plan with no contract (we need more choices!). If the math works, and I suspect it does, I am seriously thinking of going that route next time for two iPhones and plans. Although in the end it will come down to cost and also the service quality where someone lives I guess.
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post #24 of 40
Quote:
Originally Posted by freediverx View Post

I currently pay AT&T about $85/month plus fees & taxes for 450 minutes, 1500 txt messages and unlimited data. I use very few minutes, my text messages are well below my limi, and my data usage, while typically under 1.5 GB, sometimes peaks well above 2GB.

Net10 caps you at 1.5GB/month if you have an AT&T SIM card.


Exactly how would this be a good move for me?

I don't know about Net10, but Straight Talk is $45 per month with unlimited text, unlimited data, and unlimited voice. So you get far more text, all the data you need, and save $40 per month. And since it's the same network, you have the same coverage. The only downside is that you don't have LTE with Straight Talk (yet), but for most people, that's a minor issue.

How is that NOT a good move?
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post #25 of 40
Quote:
Originally Posted by jragosta View Post


I don't know about Net10, but Straight Talk is $45 per month with unlimited text, unlimited data, and unlimited voice. So you get far more text, all the data you need, and save $40 per month. And since it's the same network, you have the same coverage. The only downside is that you don't have LTE with Straight Talk (yet), but for most people, that's a minor issue.

How is that NOT a good move?

Straight Talk sounds very good. We have similar plans here in The Netherlands, albeit cheaper. The US has worse ripoff telcos, but hey, at least you live in a fantastic country. So yeah, good move.

Love the sig, BTW.
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post #26 of 40
Quote:
Originally Posted by jragosta View Post

I don't know about Net10, but Straight Talk is $45 per month with unlimited text, unlimited data, and unlimited voice. So you get far more text, all the data you need, and save $40 per month. And since it's the same network, you have the same coverage. The only downside is that you don't have LTE with Straight Talk (yet), but for most people, that's a minor issue.

How is that NOT a good move?

http://technofyi.com/2013/05/13/straight-talks-unlimited-data-plan-is-bullshit/

Straight Talk throttles your data at 1.5GB. Not only that, but it appears that once your account gets throttled, you will never be put back on your old speeds again.

We have 5 phones on a family plan with AT&T, and it comes out to $250. $50 a phone isn't that bad (and I'm grandfathered unlimited).

I guess I don't see the problem with extending a two year contract to 24 months. It's not like I signed up for a 1 and 2/3rds year contract.
post #27 of 40
Quote:
Originally Posted by ghostface147 View Post

Coming soon! 30 month upgrades with a two year contract!
I'll bite on that one.... The FTC needs to watch for that. Because AT&T accountants are burning their margin by claiming extra months against the phones. Just like that stupid $.61 fee... When its time for rate hikes, they need to tell them to flip off because they have taken profits several times already...
post #28 of 40

Good for AT&T, bad for Apple - people will now replace phones after 24 months instead of 20.  A 16% decrease in phone turnover.

post #29 of 40
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Originally Posted by PhilBoogie View Post

Love the sig, BTW.

So do I. Very nice to see it acknowledged. 1cool.gif
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post #30 of 40
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Originally Posted by realwarder View Post

Good for AT&T, bad for Apple - people will now replace phones after 24 months instead of 20.  A 16% decrease in phone turnover.

If you got your iphone 4s mid cycle - then a lot of those folks would have upgraded as soon as possible when the 5s (assuming that is what it is called) is released. They will have to wait.  On the other hand, once I have to wait I might as well look around and consider someone else other than ATT.  

post #31 of 40
Switched to T-Mobile.The NY area coverage is as good as AT&T at almost half the price.
post #32 of 40
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Originally Posted by focher View Post

Switched to T-Mobile.The NY area coverage is as good as AT&T at almost half the price.

Anyone with feedback on T-Mobile for South Florida?

post #33 of 40
Quote:
Originally Posted by JeffDM View Post

I'm surprised they didn't do it sooner. They have to provide value for their shareholders, after all.

lovely. /s

It used to be 18 months, then 20 months, I guess why wait, just jump to 24.

 

When you're competing with Verizon, you have to wait until your competition sets the terms and then you decide if you want to advertise against it, or meet their level.  Given that the 'trade-up' date is a silent date (the 2 year agreement is the same), it makes zero sense to advertise against it, because you actually 'lose' money, as most people don't even know the trade-up date exists.

 

Quote:
Originally Posted by dasanman69 View Post


4 months doesn't seem like much but that's millions of dollars in extra revenue.

 

20 months 625-200=425/20 = 21/month

more like billions  (4x20 = 80*80M [80% of total are smart phones]subscribers= 6.5Billion in Revenue, assume 50% don't even know it... 3.3B)   And this is pure profit (there is no cost for this in the short term.), so it's at least .60/share earnings before taxes.

post #34 of 40
Quote:
Originally Posted by realwarder View Post

Good for AT&T, bad for Apple - people will now replace phones after 24 months instead of 20.  A 16% decrease in phone turnover.

The other retailers may buy you out.  See Apple and BestBuy decide to offer upgrades for this... 

 

I note this as Apple was really pushing me hard to upgrade my 4s 2 weeks ago when I was in store just for the conversion fee.   I'm at 15 months.

 

at the time I was thinking it was about driving people to the 5 format (I'm of the theory that the 3.5" form factor will be unsupported early, at the end of 2014 (iOS 7 or 8  will be the last supporting that real estate, depending on FCC/carriercontract edict).

post #35 of 40
Quote:
Originally Posted by jragosta View Post


I don't know about Net10, but Straight Talk is $45 per month with unlimited text, unlimited data, and unlimited voice. So you get far more text, all the data you need, and save $40 per month. And since it's the same network, you have the same coverage. The only downside is that you don't have LTE with Straight Talk (yet), but for most people, that's a minor issue.

How is that NOT a good move?

 

 

I don't need more text messages or voice minutes, so any bonuses in these categories have no value for me. Nonetheless your comment prompted me to look into Straight Talk. 

 

Gigaom has a relevant article here:

http://gigaom.com/2012/05/23/straight-talk-it-could-let-you-dump-att-or-t-mobile/

 

Here's what I found:

 

 

  • No Visual Voicemail
    Apple’s Visual Voicemail isn’t supported by Straight Talk. Considering this was one of the coolest features introduced by the first iPhone and one I depend on daily, this alone is a deal breaker.
     
  • 2GB Data Limit
    "Based on user-reported experiences, Straight Talk requires you to keep your monthly usage to 2 GB. Hit either of these and you might get a message about excessive use, along with the threat of service termination." Not sure where you're seeing that they offer "unlimited data".
     
  • No LTE
    Not having LTE is a minor issue? This is one of the few things I would willingly pay a premium for, especially with an add-on iPad account. Next to service reliability and cost, bandwidth/speed is the most important factor in a wireless connection. 

     

So again, for someone looking for more affordable cell phone plans, these companies offer alternatives. But if you want to use your smartphone to its full advantage, I see no value in either of these companies. They're essentially offering less for less. That's a option, not a bargain

post #36 of 40
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Originally Posted by Gatorguy View Post

Quote:
Originally Posted by PhilBoogie View Post

Love the sig, BTW.

So do I. Very nice to see it acknowledged. 1cool.gif

Haven't read the thread where you posted it, but since you seem like an IT person, I'd say it was sarcastic?
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post #37 of 40
Quote:
Originally Posted by PhilBoogie View Post

Haven't read the thread where you posted it, but since you seem like an IT person, I'd say it was sarcastic?

No, I'm not even close to being an IT professional. My expertise is in business management, specifically graphic design and production. Technical detail issues having to do with network systems or application development would be way over my pay-grade.lol.gif
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post #38 of 40
Quote:
Originally Posted by CustomTB View Post

Anyone with feedback on T-Mobile for South Florida?

 

I'm in Miami, and judging from feedback from friends on TMobile it's a mixed bag. Not bad, but coverage and data speeds not as good as AT&T.

Ultimately it boils down to whether the price or the service quality is most important to you. If TMobile were truly offering the same quality fo service and coverage as AT&T for a lower price there would be a tidal wave of customers switching to TMobile. I haven't see this.

post #39 of 40
I always figured it was a 24 month period, coinciding with my 2-year plan. I guess I should start reading the fine print...
post #40 of 40
I have been with ATT for ever because they had the 20 month upgrade deal and I like new iPhones. At 24 months and the end of my contract I will be shopping for cell providers instead of automatically re-upping with ATT. Where is the customer retention gain in this deal? Seems like penny-wise, pound-foolish logic. But then again, it is the immediate quarterly profit that counts anymore. Coke Classic anyone!
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